Federal Tax Credits and Incentives Explained
The fundamental principle is simple: the more taxes you pay, the greater your potential savings through strategic tax credit utilization. Investment Tax Credits (ITCs) are a federal tax credit that represent a powerful tool for reducing your federal taxes, including federal income tax and federal capital gains tax burden while supporting renewable energy initiatives such as solar. ITCs are the most powerful federal tax credit currently available. However, there are other federal tax credits and incentives also available.
Success Stories
Our track record demonstrates the effectiveness of these strategies across various states utilizing various federal credits and incentives:
The Federal Tax Credits and Incentives
Pathways to Tax Credits
There are three primary ways to acquire tax credits:
1. Generate Them Through Projects or Investments
Installing renewable energy systems, such as solar panels at your home or business, generates valuable federal solar tax credits. These credits can be used personally or transferred to other parties. For solar investments, contact GoBien – Solar Sales for specialized guidance.
2. Purchase Existing Credits
The Inflation Reduction Act has enhanced the transferability of renewable ITC. You can now enter into agreements to purchase them from generators who cannot fully utilize them, creating a win-win situation for both parties.
3. Tax Equity Structures
Various tax equity arrangements help optimize tax advantages, including:
- Sale-leaseback arrangements
- Partnership flip structures
- Hybrid structures
Implementation Process
- Connect with a consultant through our form to explore your options
- Review consultant recommendations with your CPA (we can recommend third party, experienced professionals if desired)
- Select the optimal strategy for your situation
- Close on the opportunity and start saving money
Additional Benefits
Federal and state tax credits can be combined for added value! If you invest with a tax equity option then you have the ability to capture depreciation which will help you offset both federal and state income taxes in additional to any credit amounts.